New audit finds California state parks department has more budget discrepancies

A new audit Friday revealed millions of dollars in unspent donations and other financial irregularities at California's state parks department, six months after the agency's director resigned in a scandal over hidden money.

Last July former director Ruth Coleman stepped down amid revelations that the department had hidden $54 million in state funds from budget officials while the governor was threatening to close parks to save money.

The audit, released Friday by the state Department of Finance, did not uncover embezzlement or missing money.

But it did reveal what auditors concluded was "minimal oversight by executive management" and "inadequate controls" in the way the department keeps its books, trains its staff and oversees private donations.

"We found risks that could put the department at risk of possible abuse, waste and fraud if controls aren't strengthened," said Frances Parmelee, a CPA and audit manager of the state finance department.

Among the problems:

At a time of tight budgets, state parks staff members failed to spend $3.9 million in a fund meant for donations and bequests. The total fund balance is $20 million. Although there is no evidence that parks officials were spending donations in ways other than donors intended, some of the $3.9 million, which came from interest and donations that hadn't been given for a specific purpose, has sat unspent since as far back as 2004.

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The department did not provide clear rules or oversight of employee credit cards. As a result, auditors found $3,351 that was spent on unallowable items, including memberships in professional organizations, two-way radios and high-speed internet service.

Budget managers have not provided clear training and policies for lower-level employees to ensure the agency's funds are consistently and accurately reported to other state departments.

State parks officials accepted the audit and said they are already correcting the deficiencies.

"State parks sees this evaluation as a catalyst for improving all systems," said Major Gen. Anthony Jackson, a former Marine commander whom Gov. Jerry Brown appointed as the new state parks director last month. "And we are confident that by incorporating all recommendations for improvements, state parks will be stronger and more accountable."

The audit also confirmed that the $54 million that parks employees had kept in two accounts for years without reporting it to the Department of Finance or governor's budget officials was accurate and is not any larger than previously reported. They said the concealment of funds dates back at least to 1993, but could not offer a reason why. Some sources have said that it originated with an accounting formula glitch years ago that mid-level employees did not want to reveal for fear of reprimand.

Two other investigations -- one by the state attorney general and one by the state auditor -- are ongoing with results expected soon. Those investigators are talking with former director Coleman and other officials who have since resigned or been fired.

"Parks are an incredibly valuable asset to the citizens of California," said Elizabeth Goldstein, president of the California State Parks Foundation, an environmental group. "What happened last summer was very disappointing to those of us in the parks community. We all got socked in the chest. This moment now is about finding out what happened, fixing the problems and moving on."